The U.S. Department of Transportation late yesterday tentatively granted antitrust immunity to a proposed joint venture among three current Star Alliance members—Air Canada, Lufthansa Airlines and United Airlines—and a fourth, Continental Airlines, which also gained approval to become an antitrust-immunized member of the alliance.
The joint venture would allow the carriers on applicable international routes to share revenue, jointly set fares, schedules and services and negotiate with corporate clients where immunity extends. DOT would require the joint venture—dubbed Atlantic Plus-Plus—to begin operations within 18 months of final approval, and the involved carriers would have to provide annual reports to DOT about the implementation of alliance agreements.
"The Department tentatively concluded that granting antitrust immunity to Continental to join the alliance and approving the joint venture would be in the public interest because it would support increased levels of service in international markets served by the carriers, give consumers more travel options and shorter travel times, and reduce fares," DOT said in a press release.
DOT will field objections to the proposed approval for the next three weeks. The American Society of Travel Agents and the Interactive Travel Services Association yesterday said they would object. "If finalized, this broad grant of immunity could be used to undermine independent travel distributors, which are critical to promoting airline competition and consumer welfare," the associations said in a joint statement. "The result will be fewer choices and higher prices for consumers."
The proposed joint venture,
was announced in June 2008 in the wake of the establishment of a similar venture by Air France, Delta Air Lines, KLM and Northwest Airlines—each a member of the SkyTeam alliance that Continental plans to depart for Star on Oct. 24.
"Continental's entrance into Star Alliance will provide substantial benefits for consumers worldwide while preserving domestic competition and jobs," said Larry Kellner, Continental's chairman and CEO. "In addition, a timely final approval will allow Continental to provide a seamless transition for its customers from the SkyTeam alliance to Star Alliance this fall."